Speaker Lauds Package as a ‘Giant Step’ Toward Fixing Our Broken Pension and Benefit System
(TRENTON) — Assembly Speaker Sheila Y. Oliver on Tuesday issued a multimedia package following the General Assembly’s passage of three bills that would reform New Jersey’s pension and health benefits system, including one measure that would save local governments and schools $314 million in the fiscal year starting July 1.
- Make numerous changes to public worker health benefits, mainly by requiring all public employees to pay at least 1.5 percent of their salary toward health benefits after the expiration of a current contract (A-2460), sponsored by Assembly Speaker Sheila Y. Oliver (D-Essex/Passaic) and Assembly Republican Leader Alex DeCroce (R-Morris). It was approved 66-3-6;
- Make numerous changes to other public employee benefits, mainly by limiting sick leave payouts for all new local and school employees (A-2459), sponsored by DeCroce and Oliver. It was approved 73-2-1; and
- Make numerous changes to public worker pensions, including amendments to ensure the pension system remains financially stable for taxpayers and public workers (A-2461), sponsored by Oliver and DeCroce. It was approved 62-5-9.
One bill (A-2461) was amended and approved on an emergency basis to remove a provision that would have allowed workers to opt-out of the pension system. This was done to ensure the pension system remains stable for taxpayers and public workers alike.
A more detailed description of the legislation follows:
- Require all public employees to pay at least 1.5 percent of their salary toward health benefits after the expiration of a current contract;
- Require all newly-hired employees to pay at least 1.5 percent of their base pension toward health benefits upon retirement;
- Require that any changes negotiated by the state — such as higher co-pays — with its employees be applied to every government entity participating in state health benefits programs;
- Prohibit multiple coverage in state health benefits programs;
- Require new state workers to work at least 35 hours per week to qualify for health benefits; and
- Require new local and school employees to work at least 25 hours per week to quality for health benefits.
- Limit sick leave payouts for all new local and school employees to $15,000, just as it already is for state employees;
- Prohibit local government and school employees to carry over only one year of vacation time year-to-year; and
- Eliminate the ineffective sick leave injury program.
- Limit pension system enrollment to new full-time employees who work at least 35 hours per week for the state or 32 hours for local government and schools;
- Require all workers with more than one public job to receive a pension for only one job, with only the highest-salaried position counting toward a pension;
- Allow new employees earning at least $5,000 annually to enroll in a 401(k)-style plan;
- Change the equation used to calculate pensions for new employees by dividing the number of years worked by 60, rather than 55, thus reversing for new workers the 9 percent benefit enhancement enacted in 2001;
- Base pensions for new public workers and teachers on the five highest salary years, rather than the highest three;
- Base pensions for new police and firefighters on the three highest salary years rather than the highest single year;
- Impose a pensionable salary cap for new employees of the Police and Firemen’s Retirement System and the State Police Retirement System. Salary earned under the cap — the base salary equivalent to the maximum wage contribution base for Social Security, or for 2010, $106,800 — would be counted toward PFRS or SPRS membership. Salary over the cap could be included in a 401(k)-type program;
- Repeal 2003 legislation that allowed a police or firefighter to retire at any age with 25 years of service credit on a special retirement allowance of 70 percent of final compensation, if the retirement system reached a funded level of 104 percent; and
- Eliminate the non-forfeitable right to pension benefits after five years in the system for new employees.
The multimedia package consists of a video of Speaker speaking to reporters following the Assembly’s passage of the legislation, audio of same and a press release discussing the legislation in more detail.
The audio file is available upon request.
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